Most people think of demand as being the desire for a certain economic product. That desire must be coupled with1the ability and willingness to pay. Effective demand, that is desire plus ability and willingness to pay, influences and helps to determine prices.

In economics the relationship of demand and price is expressed by the Law of Demand. It says that the demand for an economic product varies inversely2 with its price. In other words, if prices are high the quantities demanded will be low. If prices are low the quantities demanded will be high.

The correlation between demand and price does not happen bychance3. For consumers price is an obstacle to buying, so when prices fall, the more consumers buy.

The demand for some products is such that consumers do care about changes in price when they buy a great many more units of product because of a relatively small reduction in price. The demand for the productis said to be elastic4.

For other products the demand is largely inelastic. This means that a change in price causes only a small change in the quantity demanded. A higher or lower price for salt, for example, probably will not bringabout5 much change in the quantity bought because people can consume just so much salt.

Even if the price were cut in half6, the quantity demanded might not rise very much. Then too, the portion of a person’s yearly budget that is spent on salt is so small that even if the price were to double7, it would not make much difference in the quantity demanded.COMMENTS

1. to be coupled with — бути поєднаним

2. inversely — обернено пропорцiйно

3. by chance — випадково

4. ... the demand for the product is said to be elastic — кажуть, що попит на продукт еластичний

II. Match the synonyms: by chance, to double the price, an obstacle, to consider, efficient, a cut in price, to bring about, to happen, by accident, a relationship, to cause, effective, to raise the price a hundred per cent, a barrier, to think, to occur, a correlation, a reduction in price.III. Match the antonyms:

ability, higher price, to cut, to supply, to demand, inelastic, to consume, to raise, least, to couple, small, large, inversely, to part, incapacity, to produce, most, elastic, directly, lower price. IV. Fill in the blanks with prepositions or adverbs if necessary:

1. Most ... people think ... demand as being the desire ... a certain economic product. 2. In economics the relationship ... demand and price is expressed ... the Law ... Demand. 3. It says that the demand ... an economic product varies inversely ... its price. 4. The demand ... some products is such that consumers do care ... changes ... price when they buy a great many more units ... product ... a relatively small reduction ... price. 5. The correlation ... demand and price does not happen ... chance. 6. A higher or lower price ... salt probably will not bring ... much change ... the quantity bought because people can consume ... so much salt.V. Memorize the following word-combinations.

Use them in the sentences of your own:

demand and supply — попит і пропозиція

demandfor consumer goods — попитна споживчі товари

demand keeps pace with supply — попит не відстає від пропозиції

demand outdistances supply — попит випереджує пропозицію

demand outruns production — попит випереджуєвиробництво

to be in demand — користуватися попитом

to meet/to satisfy demand — задовольняти попит

active/brisk/fair demand — жвавий попит

actual demand — дійсний/фактичний попит

aggregate demand — сукупний попит

consumer/customer/consumptive demand — попитспоживачів

effective/effectual demand — ефективний попит

VI. Translate the sentences paying attention to the italicized words:

1. Demandfor fish has exceeded supply this month. 2. The demand for milk is inelastic because it is a necessity. 3. It is impossible to satisfy all their demands. 4. They demanded that the decision should be revised.5. Children are so demanding: they need constant attention. 6. The workers are demanding better pay. 7. This sort of work demands great patience.8. Good secretaries are always indemand. 9. The worker’sdemands for higher pay were rejected by the employers. 10. Heis in great demand as a singer.

Define which of the following items best completes

the statement:

1. The demand for a good is elastic when

a. total receipts increase with each decrease in price.

b. total receipts decrease with each decrease in price.

c. price changes have no effect upon total receipts.

d. the demand curve shifts upward to the right.2.What will happen in a competitive market if the quantitysupplied

is greater than the quantity demanded?

a. consumers will demand more goods.

b. suppliers will increase their output of goods.

c. the market price will go down.

d. the market price will go up.3.As a result of an increase in price, total sales of a product increased

by $1,000. The demand for the product was

a. elastic.

b. inelastic.

c. diminishing.

d. all of the above.VIII. Complete the following sentences:

1. Most people think of demand as ... . 2. Effective demand is ... . 3. The Law of Demand says ... . 4. In other words, if prices are high ... . 5. For consumers price is ... . 6. The demand for such products is such that ... . 7. The inelastic demand means that ... . 8. The portion of a person’s yearly budget that is spent on salt is so small that even if the price were to double, it ... .

IX. Answer the following questions:

1. What do most people think of demand? 2. What is an effective demand? 3. What does it help to do? 4. What is expressed by the Law of Demand? 5. What does the Law of Demand say? 6. The correlation between demand and price does not happen by chance, does it? 7. Is price an obstacle to buying for consumers? 8. What does the elastic demand consist in?9. What does the inelastic demand for products mean?X. Translate into English:

Elasticity of supply1, as a response to changes in price, is related to demand. Economists define demand as a consumer’s desire or want, together with his willingness to pay for what he wants. We can say that demand is indicated by our willingness to offer money for particular goods or services. Money has no value in itself, but serves as a means of exchange2 between commodities which do have a value to us.

People very seldom have everything they want. Usually we have to decide carefully how we spend our income. When we exercise our choice, we do so according to our personal scale of preferences. In this scale of preferences essential commodities come first (food, clothing, shelter, medical expenses etc.), then the kind of luxuries which help us to be comfortable (telephone, special furniture, insurance etc.), and finally those non-essentials which give us personal pleasure (holidays, parties, visits to theatres or concerts, chocolates etc.). They may all seem important but their true importance can be measured by deciding which we are prepared to live without. Our decisions indicate our scale of preferences and therefore our priorities.

Elasticity of demand3 is a measure of the change in the quantity of a good, in response to demand. The change in demand results from a change in price. Demand is inelastic when a good is regarded as a basic necessity4, but particularly elastic for non-essential commodities. Accordingly, we buy basic necessities even if the prices rise steeply, but we buy other things only when they are relatively cheap.COMMENTS1. elasticity of supply — еластичність пропозиції

Change the sentences in order to use the auxiliary verbs «do»or «did».

Pattern:These goods and services have a value.

These goods and services do have a value.

The people went to the city to find work.

The people did go to the city to find work.

1. These factors have an effect upon the economic system. 2. A change in government usually means a change in policy. 3. Stable conditions led toan improvement in the general state of the economy. 4. The minister wanted to make a fundamental change in the national economic policy. 5. The decision made by the trade unions affects everyone in the industry. 6. The manager tried to change the methods. 7. Short-term economic anarchy has a bad effect on long-term stability and investment. 8. The government encourages commercial enterprises. 9. The representatives of the employers and employees met last week. 10. The surplus of money provided capital for a new housing scheme.III. Insert the article the or a(n) :

Pattern:There is ... demand for steel. ... demand for steel is increasing.

There is a demand for steel. The demand for steel is increasing.

1. There is ... shortage of bananas. ... shortage of bananas will continue for some weeks. 2. There has been ... change of government. ... change in government will probably mean a change of policy. ... change of policy may lead to ... short period of instability. ... short period of instability could create ... feeling of insecurity. 3. The speaker suggested ... special commission to study economic conditions. He said that ... special commission should examine all aspects of national economic life. ... commission should investigate ... demands of ... workers and ... conditions under which they work. It should also hear ... views of ... employers. Such ... commission would render ... very valuable service to ... nation.

1. When people offer money for particular goods, they indicate that a demand exists. 2. Money is usually valuable in itself. 3. People do not usually have everything they want. 4. Our decisions on how to use our money show what we need most and what we are willing to do without.5. Basic needs come before luxuries. 6. Demand for essential commodities is always elastic.

VI. Answer the following questions:

1. Elasticity of supply, as a response to changes in price, is related to demand, isn’t it? 2. What is the definition of demand? 3. How is demand indicated? 4. What is money? 5. What do we do when we exercise our choice? 6. What comes second in our scale of preferences? 7. What is our third priority? 8. What is elasticity of demand? 9. When is demand inelastic?

In economic theory, demand means the amount of a commodity or service that economic units are willing to buy, or actually buy, at a given price. In economic theory, therefore, demand is always effective demand, i.e., demand, supported by purchasing power1, and not merely the desire for a particular commodity or service.

Obviously, demand is not only influenced by price, but also by many other factors, such as the incomes of the demanders and the prices of substitutes. In economic analysis, these other factors are frequently assumed to be constant. This allows one to relate a range of prices to the quantities demanded in what is called the demand function (with price as the independent and demand as the dependent variable) and to graph this relationship in the demand curve.

The demand curve2 is the graphical representation of the demand function, i.e., of the relationship between price and demand. It tells us how many units of a particular commodity or service would be bought at various prices, assuming that all other factors (such as the incomes of the demanders and the prices of substitutes) remain unchanged. The demand curve normally slopes downwards from left to right, which means that more is bought at low prices than at higher prices. A famous exception to the rule of a downward-sloping demand curve is the Giffen paradox3. If the condition that all other factors remain unchanged is relaxed and the incomes of the demanders, for instance, are allowed to change, then the whole demand curve will shift its position.COMMENTS

1. Demand means the amount of a ________ or ________ that economic units are willing to buy at a given price. 2. Demand is not only influenced by ________ but also many other factors. 3. Effective demand is always supported by _________ and not merely the desire for a particular commodity or service. 4. The demand curve is the graphical representation of the _________ , i. e., of the relationship between price and ________ .5. If the conditions that all other factors remain unchanged is relaxed and the ___________ of the demanders are allowed to change, then the whole ___________ will shift its position. III. Fill in the blanks with prepositions or adverbs if necessary:

1. In economic theory, demand means the amount ... a commodity or service that economic units are willing to buy, or actually buy, ... a given price. 2. Demand is ... supported ... purchasing power, and not merely the desire ... a particular commodity or service. 3. Demand is not ... influenced ... price, but also ... many other factors, such as the incomes ... the demanders and the prices ... substitutes. 4. The demand curve is the graphical representation ... the demand function. 5. It normally slopes downwards ... left ... right, which means that more is bought ... low prices than ... higher prices.IV. Match each term in Column A with its definition in Column B:

Column A Column B

1. demand

a. Money value of a good or service.

2. the Law of Demand

b. The graphical representation of the demand

function.

3. consumer

c. Explains how much a change in price affects

the quantity demanded.

4. price

d. good or service whose consumption is seen as essential in order to maintain a minimum standard of living in a society.

5. demand curve

e. A consumer’s willingness and ability to buy

a product or service at a particular time and

place.

6. demand elasticity

f. Anyone who uses goods or services.

7. purchasing power

g. All else being equal, more items will be sold at

a lower price than at a higher price.

8. necessity

h. The value of a unit of money measured in terms

of what it can buy.

V. Define which of the following items best completes the statement:

1.Demand curves

a. show that consumers are willing to buy more at lower prices.

b. are the same for all goods and services.

c. match the price of a good with the amount supplied.

d. are statistical charts prepared by a government agency.

2.A typical demand curve

a. slopes downward from left to right.

b. slopes downward from right to left.

c. is usually a straight line.

d. is always a curved line.

Which of the following would tend to have an inelastic

demand curve?

a. complementary goods.

b. luxuries.

c. goods with substitutes.

d. necessities.

Say whether these statements are true or false and if they are

false say why:

1. In economic theory, demand means the amount of a commodity or service that economic units are willing to buy. 2. In economic theory demand is always effective demand. 3. Demand is only influenced by price. 4. Effective demand is always supported by merely the desire for a particular commodity or service. 5. In economic analysis, the incomes of the demanders and the prices of substitutes are frequently assumed to be constant. 6. The demand curve tells us how many units of a particular commodity or service would be sold at various prices. 7. The demand curve normally means that more is bought at low prices than at high prices.VII. Complete the following sentences:

1. What does «demand» mean in economic theory? 2. What is effective demand? 3. What factors is demand influenced by? 4. What is demand function? 5. What does the demand curve tell us? 6. At what price is more bought? 7. What is a famous exception to the rule of a downward-sloping demand curve? 8. When will the whole demand curve shift its position?

IX. Retell the text C using the following words and

word-combinations:

at a given price; effective demand; desire for a particular commodity or service; the prices of substitutes; quantity demanded; to graph the relationship in the demand curve; demand, supported by purchasing power; the incomes of the demanders; the graphical representation of the demand function; particular commodity or service; relationship between price and demand; at higher prices; at low prices; a downward-sloping demand curve;Giffen paradox.GRAMMAR EXERCISES

The Passive Voice. Indefinite Tenses

I. Make the following sentences interrogative and negative:

1. The film is much spoken about. 2. These books are sold everywhere.3. I am paid twice a month. 4. The shop will be closed at 8 o’clock. 5. John was taught French at school. 6. They were invited to the party. 7. Service is included in the bill.

II. Give short and full answers:

1. Are foreign languages taught at our University? 2. Are all the students supplied with textbooks? 3. Is a large number of questions asked and answered at the English lesson? 4. Are all the exercises checked up in class? 5. Will your next dictation be written much better? 6. Are computers widely applied at our University?

III. Answer the following questions:

1. When was our University founded? 2. When was it given the status of National Economic University? 3. What subjects are taught at our University? 4. What languages are spoken in Ukraine? 5. What foreign languages are taught at our University? 6. Where is English spoken? 7. Where is Ukraine situated? 8. What industries are developed in Ukraine?

IV. Put questions to the italicized words:

1. He was given two days to think the matter over. 2. These magazines must be returned in an hour. 3. The money will be spent on food. 4. The guests were shown the places of interest in the city. 5. The new method will be shown to the young specialists today. 6. We were shown a new film.7. The instructions were given to everybody.

V. Complete the disjunctive questions:

1. The news will be announced after dinner, ... ? 2. The documents will not be given back in time, ... ? 3. The exercises were done orally, ... ? 4. You are criticized a lot, ... ? 5. He will never be forgotten, ... ? 6. Something will be done about that problem right away, ... ? 7. The question was not discussed at the conference, ... ?

Ask «why-questions» about the following statements, using

the Passive Voice according to the pattern:

Pattern:They didn’t tell him the truth.  Why wasn’t he told the truth?

1. They don’t sing such songs any longer. 2. I can’t answer the telegram immediately. 3. They never mentioned the incident. 4. They didn’t expect him. 5. They needed money badly. 6. They must send him a telegram at once. 7. She can’t take this seat. 8. People always admire this picture.9. They will ask him these questions. 10. They didn’t teach them how to use the dictionary. VII. Change the sentences into the Passive Voice without leaving out

the subject of the action:

1. That company employs many people. 2. Did the news surprise you? 3. A thief stole Ann’s purse. 4. They often ask him such questions. 5. They sold us the house very cheap. 6. The director himself answered the phone.7. People don’t use this road very often. 8. They wrote him a letter. VIII. Change the sentences into the Passive Voice leaving out

the subject of the action:

1. We don’t discuss such questions at our meetings. 2. They didn’t show this film last week. 3. We must finish this work as soon as possible.4. We use this room only for special occasions. 5. They looked after the children. 6. They grow weat here. 7. They envied him his talent. 8. They often publish scientific articles in this magazine. 9. They taught him several languages when he was a child. 10. Did they explain the difficulty to you? 11. Somebody built this castle in the 16th century. 12. We shall invite him to take part in the concert. IX. Use the Passive Voice according to the patterns:

Pattern A: My friend gave me an interesting book.

An interesting book was given to me.

I was given an interesting book.

1. They showed us the postcards of New York. 2. They gave the actress a bunch of flowers. 3. They gave us no explanation. 4. He will give me the money for my holiday. 5. After graduation they offered him a good job.6. They offered us two tickets to the concert. 7. Did you send him a telegram?8. They can’t tell her the truth. 9. He showed us the way to the station. Pattern B: People say that he was a clever man.

It is said that he was a clever man.

He is said to be a clever man.

1. They say that paper has been invented in China. 2. We consider that she was the best singer in America. 3. They reported that the delegation has left Kyiv. 4. Some people consider that Hamlet is the summit of Shakespeare’s art. 5. They believed that she knows several foreign languages. 6. They expected that he would return. 7. They supposed that the weather would be fine in April. 8. People know that he is armed.Pattern C:They looked at the picture with admiration.

The picture was looked at with admiration.

1. They listened to his lectures with great interest. 2. He throws away all his old note-books at the end of the school year. 3. We must send for the doctor immediately. 4. People talk much about this film. 5. You must think the matter over. 6. They spoke to the dean on the subject. 7. People always laughed at his jokes. 8. They argued about the incident for a long time.9. She likes when people talk about her. X.Translate into English:

1. He doesn’t like to be laughed at. 2. The doctor who was immediately sent for said that the sick man must be taken to hospital. 3. Heat and light are given to us by the sun. 4. Your question can’t be answered. 5. I was told some very interesting news. 6. The game was watched with great interest.7. Nearly all the furniture will be taken out of the room. 8. I think that your plan will not be objected to. 9. The book is often referred to. 10. I was told to come here at 5 o’clock. XII. Open the brackets, using the correct form of the Active or Passive Voice: 1. Soon the plane (lose) in the clouds. 2. He is not afraid of difficulties. He never (lose) his head. 3. As he spoke his voice (rise) in excitement.4. When the little houses (leave) far behind he (hurry) along the road. 5. Streets must never (cross) against the traffic light. 6. Not a single voice (raise) against him, everybody was sure he was right. 7. The stillness in the room (break) only by a clock upon the wall. It almost (break) her heart to leave the old home. 8. If we (hurry) with the work, it may (spoil). 9. He (leave) his home town in 1970. XIII. Open the brackets, using the correct form in the Passive Voice:

by hand; with clouds; by a group of students; with a storm of applause; by electricity; by a stranger; in ink;in pencil; by the litre; by air mail.

1. Milk is sold ... . 2. These things are made ... . 3. The delegation was met ... . 4. The door was opened ... . 5. These machines are operated ... . 6. Her letters were often written ... . 7. Documents must be written ... . 8. The sky is covered ... . 9. The letter was sent ... . 10. He was greeted ... .

XVI. Insert the auxiliary or modal verb:

1. The telegram ... sent at five o’clock yesterday. 2. I am sure, a lot of questions ... be asked when he finishes speaking. 3. The traffic rules must ... always followed. 4. This book ... enjoyed by a person of any age. 5. Umbrellas and coats must ... left in the cloakroom. 6. The shops ... opened at 8 o’clock in the morning. 7. The doctor ... called early in the morning. 8. These questions won’t ... raised at tomorrow’s meeting.

1. This novel has been translated into Ukrainian. 2. The tickets had been sold by that time. 3. The telegram had been delivered in time. 4. The house will have been built by January. 5. He has been invited to the party.6. This letter has just been signed by the director. XIX. Open the brackets, using the Passive Voice:

1. He was sure that his mistake never (discover). 2. When she returned, the subject of the conversation already (change). 3. She didn’t follow the advice she (give). 4. Everybody (send) an invitation? 5. All the books from the library (return) by the end of the term. 6. The invitation (refuse; accept)? 7. I didn’t know that the letter (lose). 8. He said he had never been there but he often (tell) about this place. 9. It always (know) as a most wonderful place for a holiday. 10. When my parents were born, television (not invent) yet. 11. I never (speak) to like that before. 12. There are books that (not read) for years. 13. The house was dark and damp inside like any other building which (not livein). 14. When we came to the cinema, all the seats (sell). XX. Put the sentences into the Passive mentioning the agent where

necessary:

1. The secretary has recently brought this letter. 2. Mary has lost her key. 3. We have looked for the telegram everywhere. 4. They went home after they had finished the work. 5. The police have arrested three men.6. Somebody had cleaned my shoes. 7. I have posted the letter. 8. My little brother has broken this cup. 9. She has locked the door. 10. The children have eaten the cake. 11. They had written the composition before the bell rang. 12. By this time tomorrow, the president will have made the announcement. 13. I didn’t know that they hadn’t invited him. 14. Tom has just spilled the milk. 15. The teacher has checked our dictations. 16. They had told him the news before he left. XXI. Translate into Ukrainian:

1. I haven’t been given a chance to explain. 2. You should do as you have been told. 3. He hasn’t been seen for a long time. 4. Everything will have been arranged by the end of the day. 5. Three men have been arrested by the police. 6. The work had been done by five o’clock yesterday. 7. The telegram has just been sent. 8. Yesterday I heard that he had been sent to London.

1. He was sure that somebody was following him. 2. We couldn’t give him the daily program, we were still working it out. 3. Are they still painting tea cups by hand? 4. What are they selling in this little shop?5. Everybody is still laughing at his jokes. 6. They are making a lot of new experiments in their laboratory now. 7. What happened? Why was a crowd of people pushing the car? 8. She felt they were looking at her. XXIV. Translate into Ukrainian:

1. I must go. I’m being waited for. 2. When she entered the classroom, the last student was being examined. 3. He’ll know why he is being sent there. 4. What goods were being loaded when you came to the port? 5. What is being done to improve things? 6. When I came to the town three years ago, the bridge across the Volga was still being built. 7. I didn’t realise that our conversation was being recorded. 8. This question is being discussed at the meeting now.XXV. Complete the sentences using the Past Continuous Tense:

1. When I left the Institute I didn’t know yet the marks the students had got because their papers (look through). 2. When I was a worker at this factory this work still (do) by hand. 3. Just this very question (discuss) when I joined in the conversation. 4. I haven’t been to the show but I was present when the best photos (choose). 5. He entered the hall in the dark and didn’t understand at first what film (show). 6. She had the feeling that she (watch). 7. I wasn’t surprised that he (listen to with such interest). He is a very good lecturer. 8. He was disturbed by the noise coming from the room next to his. He was sure that some experiments (make) there. XXVI. Translate into English:

1. Rome wasn’t built in a day. 2. Old birds are not caught with chaff. 3. What is done cannot be undone. 4. Don’t count your chickens before they are hatched. 5. A tree is known by its fruit. 6. The devil is not so black as he is painted. Indefinite Pronouns: all, both, either neither

XXVIII. Translate into Ukrainian:

1. We can all take part in this work. 2. All of them are here. 3. That’s all I can tell you about it. 4. They told us all about their holiday. 5. All I’ve eaten today is a sandwich. 6. I’ve been trying to find you all morning. 7. We all felt ill after the meal. 8. We are all going out for a meal this evening. 9. We spent all day on the beach. 10. I have brought you all the books you need for this work. XXIX. Translate into English:

1. Both of these restaurants are very good. 2. They both graduated from the University last year. 3. We must both be there tonight. 4. You are both right. (or both of you are right). 5. I couldn’t decide which one to choose. I liked both. 6. He gave me two magazines yesterday. I have read both.XXXI. Translate into English:

1. Neither of us will be at home tonight. 2. The guests sat on either side of a long table. 3. Neither of us is (or: are) married. 4. Neither of the children wants (or: want) to go to bed. 5. Neither of us could remain there.6. I can agree in neither case. 7. Neither of them knew your address. 8. We can go to either restaurant. 9. Do you want tea or coffee? — Either. I don’t mind. 10. Neither of the restaurants we went to was (or: were) expensive.

1. She always felt uncomfortable when she was looked ... . 2. When will the old newspapers be thrown ... ? 3. He is spoken ... with warmth. 4. What’s that thing meant ... ? 5. The tickets must be paid ... immediately. 6. Each word he spoke was listened ... . 7. The question was not to be argued ... . 8. They read all the books that are much talked ... . 9. The matter was argued ... for days.

II. Use the verbs in bold type in the Passive Voice:

1. My chief has promised me a four-day holiday. 2. They havealways listened to these lectures with interest. 3. She had written the answers to all the questions long before the end of the lesson. 4. They have always laughed at his jokes. 5. They have known this fact for years. 6. She said that they hadn’t invited him. 7. I wondered why they had posted the letter unstamped.8. He left two years ago and we haven’t heard from him ever since. 9. Have they told him about the changes in the timetable? 10. No one has lived in this house for the last hundred years.

1. All ... the children listened to the story. 2. Almost all ... students study hard for exams. 3. Both ... those books are mine. 4. I bought two books. Both ... books were expensive. 5. I have two brothers. Both ... my brothers are in school. 6. All ... the students in my class are studying English. 7. Not all ... people are friendly, but most ... people have kind hearts.8. Almost all ... children like fairy tales. 9. Both ... us were very tired.10. Both ... my sisters are doctors. 11. Both ... her children have blue eyes. 12. Do you know all ... the people in your group? 13. Both ... my daughters are married.